Used equipment sales are down in Western Canada as business slows because of delayed rail service following the 2013 growing season, dealers report.
In addition to farmers’ cash woes, Rocky Mountain Equipment officials pointed to cold weather and delayed seeding as it reported lower sales and profits in the first quarter ending March 31.
“It was just so, so cold. The farmers weren’t out there looking to try and find a deal,” said Rocky Mountain’s Garrett Ganden. “They hadn’t started thinking about the seeding as of the end of first quarter, whereas last year it was a little bit earlier.”
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The company reported used equipment sales were down $20 million from the same period last year.
The farm and heavy equipment retailer said sales of new and used equipment fell to $198.2 million, down four percent from the same point last year.
Officials at Cervus Equipment reported increased revenues in its operations last week, including a rise of $15.6 million in its agricultural segment, which includes western Canadian dealerships.
In the quarter, the company in-creased its ownership stake in five Australian agricultural dealerships, which contributed to the increase.
“However, favourable cattle prices in Alberta and early quarter purchasing on new equipment has resulted in consistent same store sales in our Canadian agricultural operations,” said company president Graham Drake.
He said there were greater inventories of used equipment but positive sales of new machinery.
Speaking to investors, officials at both companies were optimistic about rail challenges being resolved and farmers’ prospects in the up-coming growing season.
“It has been a cool spring, and seeding hasn’t progressed dramatically, but we’ve seen just how that can turn around quite quickly,” said Drake.
“We have good moisture conditions. The commodity prices have come up so I think that’s a positive.”
Rocky Mountain’s decline in sales was partly made up by a 15 percent increase in service and support revenue as the company promoted preventive maintenance services and improved parts sales.
It increased its annual dividend to shareholders to 46 cents per share and announced an additional dividend of 11.5 cents a share.
